Gaztransport & Technigaz S.A.

Welcome to the GTT third quarter 2021 activity update. At this time, more participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star and 1 on your telephone. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Philippe Bertheau, the GTT CEO. Please go ahead. Philippe Bertheau Hello.

Good evening, everybody. I'm very pleased to be with you for our third quarter 2021 activity update. I am with Virginie Aubagnac, our group CFO, for presenting you this update. Well, first of all, let's start with the third quarter key highlights. On the first nine months of 2021, we achieved revenues of 240 million, which is 21% less compared to what we achieved at the same time in 2020. and 20% more than what we achieved at the same time in 2019. On our core business, we had a strong order in tech with 26 LNG carriers in the third quarter. Since the beginning of the year, we obtained 40 LNG carriers, two VLECs, six onshore storage carriers, with delivery dates spreading mainly over the 2023-2025 period. LNG as a fuel is picking up. In the third quarter, we obtained tanks for eight container ships, and since the beginning of the year, it's 25 container ships. In innovation, we've been very active with two new authorization in principles, ballast water-free for bunkership in July, and energy-fueled AfraMax vessel developed with Delta Marine in September. For smart shipping, we introduced a new solution, the launch of EnergyOptim to help energy operators to optimize their environmental performance. You know that We are, that's our basic purpose, to offer optimized systems which are generating the best environmental performances. We co-opted two directors, Florence Fouquet, representing Angie, who is replacing Cécile Prévieux for the reminder of her term of office. And we co-opted also Catherine Ronf, as an independent director replacing Michel Azalbert. Well, as I was saying, we have a quite strong order book as end of September 2021. On energy cars, we obtained 40 orders since the beginning of the year. We delivered 44 ships at the same time. And if we look at the energy as a fuel, we obtained 25 orders, and we delivered seven ships. So I could go into more details, but what we can say, it's a very dynamic order book with deliveries, a lot of deliveries, and a lot of new orders. It's quite lively. Energy and supply demand, well, quite obviously, new capacities are required. We can see that on this chart with the horizon of 2040. It's the sense of the decision taken by Qatar, but we can see that also through the numerous contracts passed by off-takers for contracts for SPA for American projects not yet decided. And the more it goes, the more it becomes likely that these projects are going to be decided, adding additional capacities and adding additional need for energy cars. Keeping on looking at the dynamics of the market, we can look at the Asia, Northeast Asia, with China leading the energy demand growth in 2021. With for this year, as it was the case for the past years, double-digit percentage growth, 19%. It's very impressive. China has overtaken Japan as the largest importer of energy in the world. We have also quite impressive growth in Korea with 9% growth. and in India with 4%. So a very active market in Asia. Talking about prices, we can see that current spot energy prices are calling for more energy production facilities. Prices are around $40 the MMBTU. You can see the volatility of these prices, and that just underlines the tightness of the energy offer, and in our opinion, that could lead to new decisions, but also to a certain switch to long-term contracts. When we look at energy carriers and at the spot market there, the spot charter rates, we see that they are also soaring, underlying the lack of energy carriers. We can see that for very short-term spot charter rates, which are very high with discrepancies according to the region, but we can see that also for the one-year charter rates, which are quite high, and with also, quite interestingly, a very important spread between the most modern vessels with XDF or DFD engine or MEGI engine and the old steam turbine vessels, which is underlining the requirement for more environmentally friendly ships. And I think that is a very important learning because it shows that the market really prefers the most modern shapes with very high environmental performances. And that's what we offer once more. We are really committed to that. Thanks to our latest technology, we can very significantly reduce the environmental footprint of LNG care. Well, looking at the long-term contract for energy, we can see that in spite of the current context for gas, they remain quite affordable. If you take a long-term perspective, you see that energy is significantly more affordable than what it was 10 years ago. That is largely due to the competition between the decryption projects. You know that very often they are indexed on the oil prices. So you can see the influence of the oil prices on these curves. But also the index, the percentage according to which they are indexed is decreasing due to the competition. So the more it goes, the more LNG is becoming affordable and attractive for uptakers. In 2021, LNG as a fuel container ship business has picked up quite strongly. Business for container ship has been very significant. for the last nine months, and very significantly, about 20% of them have selected LNG as a fuel. You saw the importance of the orders we obtained, and so we are on the verge of achieving a long-term goal, which is GTT membrane technology becoming a solution of preference. for energy as a fuel on ocean-gearing vessels. We announced a couple of days ago a new significant contract for Elogen, which has been selected by Soenji to equip a storage project storing hydrogen. There, Elogen will supply a 1 megawatt PEM electrolyzer, which will allow a production of 400 kilos of green hydrogen per day. So it's another significant contract obtained by Elogen after the contract we obtained earlier this year with Aon. We obtained also some other contracts which are less important, and we did not communicate but we are quite pleased by the flow of orders we are receiving since the beginning of this year, and also by the quality of all our customers, which translates, which produces, in fact, a high degree of confidence in the Elogen offering in terms of performance, in terms of industrial credibility, and in terms of capacity to support the product and the customer. Now, I will hand over to Virginie for continuing on the nine-month results.

Thank you, Philippe. Good evening, everyone. First, I'd like to remind you that 2021 figures compared with 2020 which was a peak year benefiting from a very strong order in tech in 2018 and 2019. Consolidated revenue for the first nine months are in line with our expectations, amounting to 240 million euros, a decrease of 21% compared to 2020, but an increase of 20% compared to the same period in 2019. 224 million euros came from new-build royalties, mainly LNGCs, but also from other membrane applications on the VLECs, FSU, SSRU, onshore storage, TBS, and all those products. Revenue of LNG as a fuel are down 14% over the first nine months, but we expect an increase in revenue in the future thanks to those 25 orders we get since the beginning of the year. Elogen's revenue amount to 3.3 million with an order index of 6.2 million euro over the period and we confirmed the guidance of 6 million euro sales by the end of the year. On the service side, all revenue are growing, maintenance and assistance, supplier certification, pre-engineering studies, and training activities, showing the attractiveness of our offers on the service side. I now leave the floor to Philippe to conclude this presentation.